Are insurance rates soaring across BC?

Written by Harold McNeill on January 29th, 2018. Posted in Editorials, Tim Hortons Morning Posts


Car Crash

Scenes like this are all too common in BC and take a tragic toll in lives lost and families destroyed. The cost is high and we all pay but are Insurance Rates out of control in B.C.? Check out this article, as you may be surprised to see where British Columbia sits in relation to other Provinces.

This article is brought forward following an article in the Saanich News stating ICBC rates for some classes of vehicle are grossly inflated as compared the Alberta.

The Apocalypse Now Narrative

While I do not subscribe to a “fake news” narrative, it seems newspaper reporters often pick the worse possible narrative and treat that as if it was the only fact.  That is what is now happening with respect to insurance rates in BC where private providers have been fighting the public system, ICBC, for years.

One headline reads, “Drivers facing rate hike as ICBC deficit is expected to hit $1.3 billion” (Vancouver Sun headline, January 29). Other BC News outlets carry a similar doom and gloom narrative about looming debt and rate increases.

I do not argue ICBC faces a deficit, for reasons noted below, but would it surprise you British Columbia, Saskatchewan and Manitoba (the three provinces with public auto insurance) are among those with the lowest rates in Canada? Who has the highest? Alberta and Ontario. Alberta is about $1100 per year higher than BC and Ontario, at $5,500 per year, about three times higher.  Now to the ICBC debt.

Over the last several years, the provincial government has transferred millions from the Corporation to general revenue. Following are just two of news reports in which soundly criticize the practice.  In effect, the Conservatives (using their Liberal acronym) has constantly placed the Corporation in lose-lose position vis a vis their customers.  Now the rate comparisons among the Provinces.

Times Colonist (August 2016)
Global National (August 2016)

Some years back the BC Government attempted to raid the BC Pension Corporation of a multibillion-dollar fund in the same manner, but an uprising among pensioners and other interested parties help to thwart that attack. By having all that money transferred to an ‘unfunded liability’ of the government you can only imagine the disaster that would have become.

Now to the ICBC situation.

The Data

It is easy to find data on auto insurance rates, but you need to be careful as many reports have a keen interest in promoting private insurance as being the most cost-effective model.

British Columbia, of course, has a public-private system in which basic coverage must be purchased through ICBC with purchasers given the option of adding additional coverage through private insurers. Our family follows the dual coverage option.  We have always had competitive rates and our claims experience was excellent although we know other family members who have faced some challenges with ICBC claims.

Over the years the public system in BC, Saskatchewan and Manitoba has worked well, with premiums in all three being held at or below the Canadian average. The following chart was prepared by Deloitte LLP, a source considered reliable:

Insurance Rates

Link to the Deloitte LLP Auto Insurance Report

Ontario (private) is so far above all other regions, one is given to wonder what has gone wrong with that private system. Either the insurance companies are raking off record profits or the drivers in that Province are out of control. Perhaps it’s a combination of both.

Now, reference an article presented by the Insurance Broker’s of Canada who has a vested interest in private insurance. Their statistics are completely different. BC, Saskatchewan and Manitoba sit at the top along with Ontario. For each Province, the broker’s report provides a narrative that promotes private insurance. Perhaps take a few minutes to read.

When it comes to Ontario, however, it’s hard to use the ‘private carrier is better’ message as the cost difference is massive. What the brokers do to avoid this conflict is to state the high rates are a combination of “high-frequency of claims, lawsuits and injuries” along with “high levels of crime and fraudulent claims.” They don’t even mention “private insurance” as being part of the problem. Imagine if Ontario used a system similar to British Columbia, Saskatchewan or Manitoba, all hell would break loose.

Now take a couple of minutes to read the Deloitte LLP summaries in which comparisons of electric, gas and car insurance costs across Canada is provided (Chart below or Link here to the full Report).

Fuel and Insurance Cost (1)

Click to Enlarge and Back Arrow to Return

With the three items included, British Columbia, Saskatchewan, Manitoba and Quebec, are the lowest with Alberta, Nova Scotia, New Brunswick and PEI, in the middle of the pack and Ontario, again, is in a class all it’s own at the top.

Assuming ICBC is facing a billion dollar deficit, it seems an additional average increase of $130 per each policyholder (the suggested amount listed in news reports) will help propel the agency towards balancing the books. Even with that increase, British Columbians will still be among those with the lowest auto insurance rates in Canada.

I hope people will take the time to consider these comparisons before passing judgement on the BC system.

Cheers,

Harold

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  • Maurice Smook

    August 13, 2016 |

    Hi Jillian,

    I don’t know if you are still checking this site but I had to respond again. February of 2017 it will be 72 years since this battle occurred.

    What caught my attention about this incident was on the Go Deep Documentary that aired on the History Channel. First of all I never known that this battle having ever occurred.

    According to my grade 3 teacher WW2 had never occurred. That grade 3 teacher stated that the WW2 and the holocaust was all propaganda. All of my classmates they believed her. I hate to say this but all I knew was that soldiers shooting at each other.

    I almost was expelled from school. My

    Mom my Dad my brother and my Uncle would have been arrested for propaganda. I paid the price. It was ironic a grade 5 teacher told me that Smooks are all commies. Dad was Conservative.

    All the Smooks that I known are all Conservative. If I had the money I would have loved to sue those two teachers.

    As I said I never heard of this Battle. If it were not for that program I would have never had known.

    I started to do more researching to find out more about the history of this battle. The narrator of Go Deep mentioned the names of the pilots who died that battle.

    I missed 20 minutes of that program but the camera crew had the camera’s pointed towards the sign with the names of the deceits. That is how I known.

    According to the narrator There are three who are still missing. W.J. Jackson, Harry Smook and A. Duckworth. A couple of months ago the staff of Go Deep have located Harry and A. Duckworths aircraft. This is on you tube. Harry and A. Duckworth craft is approx 650 feet deep in the Fjord. The individual who is heading this expansionary mission made it known he will not rest until all three of the missing pilots
    will be retrieved. I am sure that A. Duckworth’s kin are hoping for the same.

    What really puzzles me is that I have sent emails to the Smooks. Not one ever replying. I presume its the same with you. Sad. Dad rarely spoke about his family. It appears there is a big secret of the Smooks. I too assume Harry is a kin to my Dad. Harry maybe a 4th 5th cousin to my Dad. I too would like to know. Harry and A. Duckworth served and died for our country. The other is W.j. Jackson – who is also still missing – having died for our Country.

    In conclusion I still ask myself why is this a huge secret.

    If you are still checking this site please contact me. Maybe we may be kin.

    Take care.

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    […] More amazing still is that many of those I met are now living and working in communities in or near cities and towns where I spent much of my early life (e.g. Vermillion, Turtleford, Westlock, Edmonton, etc.) For that matter one family from Edmonton lives no more than a stones throw from the home in which my family lived in 1949 at 12237, 95th Street, a time when Edmonton boasted a population of 137,000 and our home was on the very west edge of the city. Today the next block contains the Yellow Head Highway. Link: https://www.mcneillifestories.com/mcneill-family-edmonton/ […]

  • Valerie Heuman (Roddick)

    June 19, 2016 |

    Having just returned to the Okanagan Valley from a weekend in Pibroch, I am delighted to have stumbled on your blog to see the picture of the main street. My aunt and uncle Peggy & Gordon McGillvery owned and lived in the old Post Office on the North east corner of the main intersection and my brother Adrian currently lives south a bit backing on the School yard. We are Sheila’s cousins and still have a close connection to the town.

  • Sheila(Roddick) Allison

    May 19, 2016 |

    Hi. So fun to find your blog. I remember going to school with you and Louise. I loved my childhood in Pibroch which incidentally was named by my grandfather Aaron Roddick. I will never forget the night the garage burned down. Nice to see the landmark photo before the big fire!

  • George Dahl

    April 12, 2016 |

    What a great site. I’m trying to locate a woman named Sally Jennifer who was from the Cold Lake area back in the early sixties. I met her when I was stationed at Namao air base in Edmonton. I was serving with the USAF 3955 air refueling squadron from rhe fall 1963 till the spring of 64. Sally was 22 at the time I was 21. Sally was my first love. I had orders to ship out to South East Asia and we lost contact after that.
    If any of you know the where abouts of Sally I would like to get reacquainted with her. She is First Nation, Blackfoot I believe. She is Catholic and may have attended a Catholic school in Cold Lake.
    Thank You in advance, George Dahl

  • dave armit

    March 23, 2016 |

    good old fashioned police work done by good old fashioned policemen……….in regards to mr cain..i learned a few years ago that he was born on the same day in the same hospital that i was..my father was a close friend of the cain family…!!! interesting..d a

  • Joyce McMenamon

    March 1, 2016 |

    Haha, love it! We should probably eat rats and rabbits rather than beef. Also I’ve noticed that there are a lot less pests where dogs are not kept on leashes.

  • Kari

    February 27, 2016 |

    Thanks for a wonderful trip down memory lane Dad!!! That was an amazing trip and I am so glad that we had the opportunity to share that experience together!
    ❤️